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[2026] NSWSC 847
Supreme Court of NSW
2026-07-20
Pike J
Original judgment source is linked above.
Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: Charter Financial Planning Ltd v Scott North Pty Ltd (No 2) [2026] NSWSC 847
Hearing dates: On the papers
Date of orders: 20 July 2026
Decision date: 20 July 2026
Jurisdiction: Equity - Commercial List
Before: Pike J
Decision: (1) The defendants pay the plaintiffs’ costs in relation to question (a) on the ordinary basis, assessed and payable forthwith.
(2) The plaintiffs pay the defendants’ costs in relation to question (b) on the ordinary basis, assessed and payable forthwith.
Catchwords: COSTS — separate questions — mixed success — plaintiffs succeeded on group membership question in relation to corporate defendant but not individual defendant — defendants succeeded on whether settlement deed barred remaining cross-claim — whether issue-based costs order — relative significance and forensic burden of separate questions — offer of compromise directed to one separate question — indemnity costs refused
Legislation Cited: Civil Procedure Act 2005 (NSW), s 98
Uniform Civil Procedure Rules 2005 (NSW), rr 28.2, 42.1, 42.14
Cases Cited: Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304
Charter Financial Planning Ltd v Scott North Pty Ltd [2026] NSWSC 677
Joudo v Joudo (No 2) [2024] NSWSC 469
Loan Market Group Pty Ltd v Chief Commissioner of State Revenue (NSW) (No 2) [2024] NSWSC 1393
OAC Operations Pty Ltd v Coogee Diggers Ltd (No 2) [2025] NSWSC 1532
Sze Tu v Lowe (No 2) [2015] NSWCA 91
Texts Cited: Nil
Category: Costs
Parties: Charter Financial Planning Ltd (First Plaintiff)
AMP Financial Planning Pty Ltd (Second Plaintiff)
Scott North Pty Ltd (First Defendant)
Arthur North (Second Defendant)
Representation: Counsel:
R O’Donnell (Plaintiffs)
N Case (Defendants)
Solicitors:
HWLE Lawyers (Plaintiffs)
Snowton Saje (Defendants)
File Number(s): 2023/00302273
Publication restriction: Nil
I gave judgment in these proceedings on 15 June 2026: Charter Financial Planning Ltd v Scott North Pty Ltd [2026] NSWSC 677 (Primary Judgment or PJ).
These reasons assume familiarity with and maintain the same definitions and abbreviations as in the Primary Judgment.
The Primary Judgment determined two questions which had been ordered to be decided separately from other questions in the proceedings pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR).
The questions and the answers I gave were:
a. Are the defendants group members of the class action proceedings in Equity Financial Planners Pty Ltd v AMP Financial Planning Pty Ltd VID 498 of 2020? Yes in relation to the first defendant and No in relation to the second defendant.
b. If the answer to (a) is “yes”, do clause 2.5(a), 2.6 and 2.7 of the Settlement Deed approved by McElwaine J in Equity Financial Planners Pty Ltd v AMP Financial Planning Pty Ltd [2024] FCA 1036 in the Class Action bar the Defendants from bringing the Cross Claim against the plaintiffs? No.
The plaintiffs primarily seek issue-based costs orders. They seek their costs of and incidental to question (a), on the ordinary basis up to and including 23 January 2026 and on the indemnity basis thereafter. They accept that they should pay the defendants’ costs of question (b). The respective costs orders would then be set off.
In the alternative, the plaintiffs seek an order that the defendants pay 70% of the plaintiffs’ costs of the separate question hearing and that the plaintiffs pay 30% of the defendants’ costs. Again, those costs would be set off.
The plaintiffs also contend that any net costs entitlement in their favour should be payable forthwith.
The defendants contend that they were the successful parties on the separate questions and should receive their costs. Their main submission is that, approached pragmatically, there was one event: whether the defendants were barred from pursing their cross-claim. The defendants succeeded on that issue and may continue to pursue the cross-claim.
Alternatively, the defendants submit that the circumstances do not warrant any issue-based costs order. If costs are to be apportioned, they contend that a broad-brush division of 50/50 is appropriate, with the practical result that there should be no order as to costs.
For the reasons below, I am satisfied that the appropriate exercise of the Court’s discretion is that the defendants pay the plaintiffs’ costs in relation to question (a) and the plaintiffs pay the defendants’ costs in relation to question (b), each on the ordinary basis and assessed and payable forthwith.
The principles are well understood. Section 98 of the Civil Procedure Act 2005 (NSW) provides that costs are in the discretion of the Court. UCPR r 42.1 provides that costs are to follow the event unless it appears to the Court that some other order should be made.
The identification of the relevant ‘event’ is not always straightforward. Where proceedings involve multiple issues or events, the Court may take account of whether an issue was distinct or dominant, the extent to which it occupied hearing time and preparation and the degree of success achieved by the parties: Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [40]; Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38].
However, the mere fact that a successful party failed on an argument or issue does not necessarily warrant an issue-based costs order. Costs should not ordinarily be dissected with excessive refinement. The exercise remains one of discretion and evaluation. Where apportionment is appropriate, mathematical precision is illusory and a broad-brush approach is generally required.
Ultimately, the question is what is fair between the parties, having regard to their respective responsibility for the incurring costs: Loan Market Group Pty Ltd v Chief Commissioner of State Revenue (NSW) (No 2) [2024] NSWSC 1393.
I do not accept either party’s attempt to characterise the result as an uncomplicated victory.
The defendants are correct that the practical reason for seeking the separate determination of the questions was to resolve AMPFP’s contention that the defendants were precluded from pursuing the cross-claim by reason of the Class Action Settlement Deed.
On that ultimate matter, the defendants achieved substantial success. Question (b) was answered “No”. The consequence is that the defendants are not barred by cll 2.5(a), 2.6 and 2.7 of the Settlement Deed from advancing the remaining cross-claim. The plaintiffs’ contention to the contrary was rejected.
The defendants’ chose to put in issue question (a).
The plaintiffs achieved substantial success on question (a), but not complete success in that it was accepted that Mr North was not a group member.
The principal controversy on that question was whether SNPL was party to an ARA as at 8 August 2019. I rejected the defendants’ contention that it was necessary for the plaintiffs to prove that SNPL had signed an ARA before SNPL could be a group member. I was satisfied that SNPL was party to an ARA. I also concluded, in any event, that the objective evidence comfortably supported the inference that SNPL signed version 1.1 of the ARA in or about 2004.
The defendants’ reliance on the Agency Agreement and their estoppel argument arising from the recitals to the Buyback Deed was also rejected.
It is true that question (a) was answered “No” in relation to Mr North. However, that answer followed because SNPL, rather than Mr North, was named as the Practice in the ARA. The substantial factual and contractual contest on question (a) concerned SNPL.
Question (a) also occupied considerably more of the factual evidence than question (b). The relevant evidence extended over the history of the contractual arrangements between AMPFP, SNPL and Mr North, the introduction of the authorised representative regime, the ASIC records, several iterations of the ARA and Master Terms, the partial BOLR exercise in 2012 and numerous communications extending over many years.
The reasons in the Primary Judgment reflect this. The determination of question (a) extends from [35] to [145]. Question (b) is dealt with from [146] to [208]. I do not regard the number of paragraphs in a judgment, or the relevant word count of a transcript, as a satisfactory mathematical basis on which to apportion costs. Nonetheless, the comparative forensic burden of the two issues is relevant and was plainly not equal.
It is also of some significance that the reason why the matter was not able to progress too far last year was because of the late production of material relevant to question (a). I made orders at the time on the costs of the vacation of the hearing date. The need for a vacation of the hearing date highlights the significance of the issue and that significant costs were incurred in relation to it.
There is one further matter. As recorded at PJ [33], the defendants accepted that their damages claim, insofar as it was calculated by reference to the difference between the 4x and 2.5x multipliers, overlapped with the Class Action and could not be maintained. The answer to question (b) was given on that basis: PJ [208].
I therefore do not accept the defendants’ submission that they simply succeeded on the separate questions and are entitled to all of their costs under the ordinary rule.
In my view, each question is appropriately viewed as an event for costs purposes. The questions were appropriately crafted having regard to what was in issue between the parties. The defendants chose to put in issue the existence of an ARA. They lost on that point.
The appropriate costs order – ignoring for present purposes the 23 January 2026 offer – is for the defendants to pay the plaintiffs’ costs in relation to question (a) and for the plaintiffs to pay the defendants’ costs in relation to question (b).
I have considered whether I can gauge the costs likely associated with each question so as to make one overall costs order, or orders based on percentages as sought in the alternative by the plaintiffs. Notwithstanding that I can approach the issue with a broad brush, the material simply does not enable me to make even a rough assessment of the costs attributable to each issue.
I do not regard an assessment of the hearing time devoted to each issue as an appropriate basis on which to apportion costs. Whilst question (a) involved considerable factual material, question (b) had considerable legal complexity. Considerable work would likely have been carried out on each outside of the hearing.
It is also difficult, in my view, to confidently divide hearing time referable to each question.
If agreement cannot be reached on costs, the task of working out what costs are attributable to each question is best carried out as part of the assessment process.
The plaintiffs rely on an offer made on 23 January 2026. It purported to be an offer made in accordance with UCPR r 20.26 or alternatively a Calderbank offer.
The offer was directed to question (a). In substance, the plaintiffs proposed that the defendants agree that the answer to question (a) is “Yes” and that there be no order as to the costs of question (a) from 11 December 2025 onwards.
This offer was expressly stated to be on the basis that the plaintiffs still intend to seek their costs from the defendants “pursuant to the Costs Order”. The “Costs Order” was the order that I made at the time of the vacation of the initial hearing on 10 December 2025 to the effect that the defendants pay the plaintiffs’ costs thrown away by reason of the vacation of the hearing dates. The letter also stated that the Costs Order exposed the defendants to a significant costs liability in the sum of approximately $199,248.87. This figure appears to be what the plaintiffs estimate to be their recoverable costs incurred in relation to the entirety of the Separate Question Hearing up to and including 10 December 2025. The assumption is that all of those costs were thrown away.
The offer set out why the plaintiffs contended that the defendants would fail on question (a), including by identifying specific documents.
The plaintiffs contend that they obtained an outcome no less favourable than the terms of the offer, and as such they are entitled to costs of and incidental to question (a) on the ordinary basis up to and including 23 January 2026 and on the indemnity basis thereafter.
The plaintiffs alternatively contend that the defendants unreasonably rejected the offer and that, having obtained an outcome no less favourable than the offer, the plaintiffs should receive indemnity costs of question (a) after 23 January 2026.
The written submissions of the defendants advanced two matters against the order for indemnity costs:
(a) The offer was not genuine, being an offer to capitulate on the first question and to invoke the indemnity costs rules to induce that capitulation; and (b) It was not unreasonable for the defendants to reject it in circumstances where the plaintiffs did not complete their evidence until after the offer was made and only 6 days prior to the hearing.
The submissions did not address in any detail the relevant provisions of the UCPR, being principally rr 20.26 and 42.14.
The plaintiffs’ submissions did not address the issue of whether there was any compromise in the offer.
It is clear that the purpose underlying the rules implicitly requires that an offer reflect some real element of compromise. Whether there was a real element of compromise is determined objectively according to the circumstances of the particular case, at the time the offer was made, rather than with the benefit of hindsight: see OAC Operations Pty Ltd v Coogee Diggers Ltd (No 2) [2025] NSWSC 1532 at [12]–[13].
It is not readily apparent what element of compromise there was in the offer. In substance it was to enforce the existing costs order – which the plaintiffs interpreted as covering all of their costs up to 10 December 2025 – and require the defendants to give up on question (a). The plaintiffs merely assert their existing entitlement, calculated on assumptions favourable to themselves, rather than offering any identifiable concession in respect of that entitlement. The offer amounts to little more than a demand that the defendant capitulate to the plaintiffs’ asserted position. Whilst the plaintiffs were obviously agreeing to bear their own costs incurred from 11 December 2025 to the date of the offer, there is nothing to indicate whether those costs were substantial.
It is also not apparent to me that the outcome is no less favourable to the plaintiffs than the offer. The answer ultimately given to question (a) was not the unqualified “Yes” contemplated by the offer. The answer was “Yes” in relation to SNPL and “No” in relation to Mr North.
This is not a merely semantic distinction. The group member definition required the relevant person to have been named as the Practice in the ARA. Mr North was not so named. The plaintiffs did not obtain the answer to question (a) which the offer required the defendants to accept.
That is sufficient to dispose of the plaintiffs’ reliance upon the offer as engaging the usual costs consequences of an offer of compromise under the UCPR’s.
Nor am I otherwise satisfied that the defendants’ rejection of the offer was so unreasonable as to warrant an indemnity costs order.
As regards the relevant principles, I repeat what I said in Joudo v Joudo (No 2) [2024] NSWSC 469 at [12]–[15]:
[12] The relevant principles in relation to costs are not in dispute. Section 98 of the Civil Procedure Act 2005 (NSW) provides that, subject to the rules of Court, costs are within the discretion of the Court. The discretion is a broad one. UCPR r 42.1 provides that “if the court makes any order as to costs the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to whole or any part of the costs”.
[13] In circumstances where one party seeks indemnity costs by reason of the rejection of a Calderbank offer, it is clear that the rejection does not give rise to a presumption that the offeree should pay the offeror’s costs on an indemnity basis: SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 (SMEC Testing); Jones v Bradley (No 2) [2003] NSWCA 258 per Meagher, Beazley and Santow JJA at [8]-[9]. Instead, the question is whether the rejection of the offer, in all the circumstances, justifies departure from the usual rule that party-party costs follow the event: SMEC Testing per Giles JA at [37]. The party seeking indemnity costs on the basis of such an offer must show that it was a genuine offer, which was capable of acceptance, and that it was unreasonable for the offeree not to accept it: E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296 per Ward CJ in Eq at [61].
[14] In Miwa Pty Limited v Siantan Properties Pte Limited (No 2) [2011] NSWCA 344 (Miwa (No 2)), Basten JA (with whom McColl and Campbell JJA agreed) at [12] adopted the following list of factors identified by the Victorian Court of Appeal in *Hazeldene’*s Chicken Farm v Victorian WorkCover Authority (No 2) (2005) 13 VR 435; [2005] VSCA 298, as the factors relevant to a consideration of whether the rejection of an offer was unreasonable:
(a) the stage of the proceeding at which the offer was received;
(b) the time allowed to the offeree to consider the offer;
(c) the extent of the compromise offered;
(d) the offeree’s prospects of success, assessed as at the date of the offer;
(e) the clarity with which the terms of the offer were expressed;
(f) whether the offer foreshadowed an application for an indemnity costs in the event of the offeree’s rejecting it.
[15] It is clear that the question of unreasonableness must be assessed at the time that the offer was made, and not with the benefit of hindsight resulting from a known outcome, recorded in a judgment: see Miwa (No 2) at [11]. It is also clear that determining unreasonableness should not entail a detailed investigation into the state of preparation or knowledge of the offeree as at the date of the offer.
The hearing originally listed on 9 and 10 December 2025 did not progress far because of the late production of documents by SNPL and Mr North. Some of that documentary material became important to question (a). That matter does not assist the defendants.
However, the evidentiary position continued to develop after the offer was made. The plaintiffs themselves served further evidence shortly prior to the resumed hearing. The case on question (a) ultimately required consideration of a substantial body of historical material and several alternative arguments concerning contract formation, inference and estoppel.
With the benefit of the final evidentiary record, I was comfortably satisfied that SNPL was party to an ARA. That does not mean that the defendants’ position was inevitably doomed as at 23 January 2026 or that their failure to accept an offer requiring an unqualified affirmative answer in relation to both defendants was unreasonable.
Furthermore, I repeat what I said above in terms of the lack of any obvious compromise in the offer.
I am not satisfied that an order for indemnity costs should be made.
The defendants should pay the plaintiffs’ costs in relation to question (a) and the plaintiffs should pay the defendants’ costs in relation to question (b), on the ordinary basis.
There is no reason why the respective costs orders should not be assessed and payable forthwith. The separate questions have been finally determined.
The Court orders that:
The defendants pay the plaintiffs’ costs in relation to question (a) on the ordinary basis, assessed and payable forthwith.
The plaintiffs pay the defendants’ costs in relation to question (b) on the ordinary basis, assessed and payable forthwith.
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Charter Financial Planning Ltd
Scott North Pty Ltd (No 2)